Extra Help is a financial support program for Medicare beneficiaries. It helps people with limited resources manage the cost of prescribed drugs. An income limit determines eligibility, which may change annually.
The Social Security Administration (SSA) estimates that the Extra Help program can help save individuals around $5,900 per year.
Extra Help is also known as a low income subsidy (LIS). This means that the amount of help a person receives from the government may vary as it depends on income and financial need.
Medicare Extra Help could save an individual a substantial amount of money each year by helping them pay for premiums, deductibles, and copayments.
Even though the Extra Help program is beneficial, many individuals who qualify have not yet enrolled.
This article looks at the Medicare Extra Help program, the income limits, benefits, and how a person can apply to the LIS program to help with the cost of their prescriptions.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
- Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Original Medicare covers the costs of medication during a stay in the hospital. However, there is limited coverage for take-home prescription drugs.
Medicare Part D is a plan that covers prescription drugs. The plan is also known as a prescription drug plan (PDP).
When a person has a PDP, they usually pay monthly premiums, copayments, and deductibles.
Private insurance companies administer PDPs, and because of this, different benefits and coverage options may apply. Costs will also vary.
Each plan has a formulary, or list, that specifies which prescription drugs the plan covers.
An individual should ensure that the plan they wish to enroll in covers the prescription drugs they need.
Medicare Extra Help is available to those with limited income and resources who have a PDP.
The plan helps pay premiums, deductibles, and coinsurance associated with prescribed medication.
Medicare Extra Help can only pay costs associated with prescription drug coverage. It cannot help to pay towards Medicare Part A or Part B costs.
An individual who is eligible for Medicaid has a Medicare savings program (MSP) that helps them to pay their Part B premiums.
A person with an MSP or Supplemental Security Income (SSI) benefit will automatically qualify for Extra Help.
The government restricts the Medicare Extra Help program to those with income and resources below a specific limit.
To qualify for assistance in 2024, a person must be enrolled in Medicare Parts A and B and meet the income and resource requirements.
According to the SSA, resources include the value of items individuals own. These may include:
- bank accounts, such as checking, savings, and certificates of deposit
- real estate other than their primary residence
- bonds, including U.S. Savings Bonds
- stocks
- Individual Retirement Accounts (IRAs)
- mutual funds
- cash that is at home or anywhere else
The following table shows the income and resource limits for 2024.
| Situation | Income limit | Resource limit |
|---|---|---|
| Individual | $22,590 | $17,220 |
| Married couple | $30,660 | $34,360 |
Individuals can apply for Extra Help through the SSA online.
How are income limits set?
The government uses the federal poverty level (FPL) to set its income limits. The level is set for each state every year, depending on the cost of living and average income.
The income limit for Medicare Extra Help changes in line with the federal poverty level.
Depending on circumstance, a person with a higher income may still qualify. Examples include those who live in Alaska or Hawaii or those who support a dependent family member.
People may qualify for either full or partial Extra Help, depending on their income and assets.
What is not counted toward the income limit?
Medicare does not count certain kinds of payment or assistance toward the income limit for Medicare Extra Help.
Typically, payments from the federal or local governments do not count. For example:
- Supplemental Nutrition Assistance Program (SNAP) or food stamps
- housing assistance
- home energy assistance
- earned income tax credit payments
- disaster assistance
- victim’s compensation payments
- scholarships and education grants
Medicare also does not count any money that someone else provides to help toward an individual’s household expenses.
The Medicare Extra Help program offers people several benefits, including:
- Payment of premiums: Payment of Medicare Part D premiums will be taken care of by Extra Help, up to a set amount. The amount varies from state to state.
- Payment toward drugs: Prescription drug costs are reduced, providing a person’s prescription is on their PDP formulary, and they use pharmacies within the plan’s network.
- Help with enrollment: A Special Enrollment Period (SEP) applies that allows additional time to enroll in a PDP.
- Removal of penalties: Late enrollment penalties can apply to PDPs if someone delays enrollment. These penalties will not apply.
Medicare Extra Help does not replace Medicare Part D and cannot exist on its own.
A person must still have Original Medicare and a PDP to receive Medicare Extra Help benefits.
Learn more about Medicare prescription drug plans.
Depending on a person’s circumstance, their Extra Help may remain the same, increase, decrease, or end.
If an individual no longer qualifies for Medicare Extra Help, their coverage will continue until the end of the year.
The Department of Social Security regularly reviews eligibility for Extra Help. A request for further information may arrive, and the person must complete and return the request within 30 days.
If someone does not return the form or returns it late, their Extra Help coverage will end in January of the following year.
If an individual no longer qualifies for Extra Help, they may still receive help to pay for prescription drug costs.
Individuals should contact their state’s Medicaid office or State Health Insurance Assistance Program (SHIP) for information on the support available.
The government provides four different Medicare savings programs that can help to pay for Medicare Part A and Part B premiums.
The rules regarding eligibility for these programs vary by state, so people should contact the Social Security Administration at 800-772-1213 to find out if they can apply.
The programs can help someone pay for their Medicare expenses in the following ways:
- Qualified Medicare Beneficiary (QMB) programs help pay for Part A premiums, Part B premiums, deductibles, coinsurance, and copayments.
- Specified Low-Income Medicare Beneficiary (SLMB) programs help pay Part B premiums for those who have Part A and a limited income.
- Qualifying Individual (QI) programs help pay Part B premiums for those who have Part A and a limited income. A person must apply every year and cannot apply if they qualify for Medicaid.
- Qualified Disabled and Working Individuals (QDWI) programs help toward the Part A premium for qualifying individuals, such as working disabled people ages 65 years old and under who lost their premium-free Part A when they returned to work.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
The Medicare Extra Help program provides help toward prescription drug costs for people who have a low income.
To qualify, someone must have an income of less than $22,590 with less than $17,220 in resources. The income level increases for a married couple to a combined $30,660, with resources of $34,360 or less.
Once Medicare approves the application, people can enroll in a Part D plan immediately without having to wait for an enrollment period and without receiving a late enrollment penalty.